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Tuesday, 21 April 2009

Bankers eye Islamic finance jobs as crisis hits

MANAMA (Reuters) - A growing number of investment bankers whose jobs have been axed due to the global financial crisis are leaving conventional banking to move into Islamic finance, banking executives say.

Executives from Islamic banks told a Reuters Islamic Banking and Finance Summit this week the number of applications from conventional bankers wanting to enter the industry, seen as having huge growth potential, was rising sharply.

And most agreed the move from conventional to Islamic banking was relatively straightforward.

"It's totally changing. I'm seeing CVs from the London market, also the Far East, and more than anywhere else, from Dubai," said Nabeel Kazerooni, head of private equity at Bahrain-based Islamic investment bank Gulf Finance House (GFH) GFHB.BH.

Earlier this week Japanese brokerage Nomura Holdings Inc said it would cut another 50 investment banking jobs, while UBS AG said it was culling 8,700 posts, almost half in its wealth management division.

With all these bankers out of work, the appetite for jobs in Islamic finance is picking up, executives said.

"The days of a shortage of Islamic bankers and the outrageous compensation that some were being paid are finished," said Simon Eedle, managing director of Global Islamic Banking at France's Calyon.

GFH's Kazerooni, who is based in Bahrain, said jobseekers were also pushing harder than ever to get themselves noticed.

A number of banks are building up their Islamic finance units in the wake of the global credit crisis, tapping into a nascent industry estimated at $700 billion to $1 trillion in asset size and enjoying 15 to 20 percent annual growth.

ISLAMIC KNOW-HOW

Most participants at the summit agreed a background in Islamic law was a bonus but not a must. Many banks have in-house scholars who are consulted on whether a structure is sharia-compliant, and know-how of conventional banking is actually highly prized, especially in the Gulf Arab region.

"Today the Islamic element of the transactions is relatively straightforward," Kazerooni said. "You have good scholars who help a lot. You need good lawyers, then you are fine."

Objections which could arise are more related to fears that conventional investment banking practices, blamed by many for being at the root of global financial crisis, could spill over.

"There is a danger of these conventional investment bankers trying to impose their ideas onto Islamic structures. It is very dangerous," said M. Hidayathullah Baig, head of Islamic finance and advisory at Bahrain-based investment bank First Energy Bank.

Most, however, see an inflow of skilled investment bankers as a huge opportunity.

"You need more bankers who can do what the conventional guy does, the proper analysis, due diligence, proper structuring, that's what we need in the region," Kazerooni said. "It's a great opportunity for us to get access to these talented people."

Majid al-Sayed Bader al-Refai, chief executive of investment bank Unicorn, agreed: "I'm interested in those big smart players that are being kicked out in Europe and America, that's who I want to get my hands on. We've always had very high-caliber Westerners with us, but now you have even more to choose from."